- Pakistan Rupee (PKR) boosted by upbeat comments from the Finance Ministry
- Imports and exports are expected to have rebounded this month
- US Dollar (USD) trades higher versus major peers as some progress is made towards another stimulus package.
- US consumer confidence expected to fade
The US Dollar Pakistani Rupee (USD/PKR) exchange rate is slipping lower for a second straight session on Tuesday. The pair settled -0.5 on Monday at 166.87 in its biggest one-day decline in almost a month. At 08:30 UTC, USD/PKR trades -0.25% at 166.45.
The Pakistan finance ministry has forecast positive economic growth in July and also sees an uptick in inflation as petrol rises rise. Based on the Monthly Economic Indicator (MEI) the ministry said that economic activity has increased and even went so far to say that should covid cases slowdown further economic activity could return to normal levels quickly.
Adding to the upbeat tone, the ministry said that it expected imports and exports to recover in July. Furthermore, due to Eid and the revival of economic activity workers remittances is expected in the region of $1.8 – $2 billion.
The US Dollar is trading lower versus the Pakistani Rupee however it is rebounding versus its major peers after slumping over the past 10 days.
Optimism is growing that more US stimulus is coming soon. Senate Republicans proposed a $1 trillion coronavirus aid package paving the way for talks with Democrats, ahead of expanded unemployment benefits for millions of workers expiring on Friday. The plan has attracted criticism from the Democrats who believe more stimulus is needed saying that $1 trillion is too limited compared to the $3 trillion programme they support.
Attention will now turn to US consumer confidence data. Analysts are expecting sentiment to fade in July after rebounding in June as coronavirus cases across the southern states of America continue to rise and lockdown measures are re-imposed in some areas. Weakening consumer confidence is an ominous sign for the economic recovery in an economy which is so dependent on consumer spending.